ADB Commits $550 Million to Largest Dam Project in SAARC Region


The Asian Development Bank (ADB) has committed to invest in the 635 MW Dudhkoshi Reservoir Hydropower Project.

A team consisting of Managing Director of Nepal Electricity Authority Kul Man Ghising, Director General of ADB Ramesh Subramaniam and ADB Country Director for Nepal Arnaud Cauchois inspected the project site on Wednesday.

The team inspected the project’s reservoir area and the powerhouse site and interacted with the local people’s representatives at Rabuwa Bazar in Khotang, the dam site, said Basu Kalauni, Deputy Director of NEA and administration chief of Dudhkoshi Reservoir Hydropower Project.

In the event, Director General Subramaniam said that this was the last inspection from a high level to move the project forward and said that under the leadership of ADB, financial management was going to be done as soon as possible.

Stating that the project has been accepted by the local residents, he said that the technical, environmental and social aspects of the project, which have been in discussion for 38 years, should be finalised as soon as possible and forward the construction work.

He said that investment will be finalised by the end of 2024.

Under the leadership of ADB, various international financial institutions will invest USD 1 billion dollars in subsidised loans in the project. Out of this, ADB has committed a concessional loan investment of USD 550 million in the project.

ADB Country Director for Nepal Arnaud Cauchois said that they are working diligently to speed up the decision-making process and are involved in regular talks with the Nepalese government.

He urged the local community to be patient, saying that the Dudhkoshi Reservoir Hydropower Project is a mega project and the largest dam project in the SAARC region so far.

Ghising said that as Dudhkoshi is an important project for Nepal’s electricity system, financial management is being done under the leadership of ADB within December, 2024.

He said that technical, environmental and social issues are currently being finalised for this.

During the interaction, the local people’s representatives requested that the confusion regarding the project be removed immediately as the development activities at the local level were stopped due to the failure of the project to proceed.

They promised to provide necessary support and facilitation locally to advance the project.

Chairman of Chisankhugadhi Rural Municipality, Okhaldhunga, Nishant Sharma, Chairman of Rawabesi Rural Municipality Phatik Kumar Shrestha and Mayor of Halesi Tuwachung Municipality Bimala Rai who were present from the affected areas, demanded that the project work should be expedited.

They said that because the work of the 635-megawatt reservoir hydropower project did not go ahead, other development works were also hindered.

“The land has been retained, but the work has not progressed. So let the work start quickly, we will have our full support.,” they said.

Bimal Gurung, Chief Executive Officer of Dudhkoshi Hydropower Company Limited, briefed about the historical context of the project, the main proposed structure and the current status of the progress of the project.

He expressed his commitment to start the project work and hoped to receive financial support from ADB as soon as possible.

Gurung said that the project will cover various other activities such as construction and maintenance of access roads, bridges, and other related infrastructure.

Around 3,139 households in Khotang, Okhaldhunga and Solukhumbu districts will be affected by the construction of the project.

Out of this, 238 households will be fully affected and 2,901 households will be partially affected. About 30,000 hectares of land has to be acquired for the project. Although the compensation has been discussed for a long time, it has not been fixed.

The compensation has not been determined due to insufficient budget, according to Deputy Director Kalauni.

“All preparations for compensation have been completed, there is no problem. Now it doesn’t even take 15 days to determine the compensation, but this year it has been stopped because the government has allocated less budget,” he said. “There is no need to panic now, the budget will be managed and all the work will proceed by 2024.”

The government has allocated Rs. 500 million for the work, including compensation of acquired land.

The project will generate 3.44 billion units of electricity annually. Out of this, 1.36 billion units of electricity will be produced in the dry season and 2.8 billion units in the rainy season.

The construction period of the project is seven years.

Source: Rising Nepal